An adjustment of a March-July $17 call spread trade on Avon Products seems to expect that shares will top $17 by July expiration. Avon shares rose 25cents to $16.98 during Thursday's afternoon session and options volume on thecosmetics company is running 4.2 times the daily average with 43,000 calls and1,396 puts traded on the stock so far, according to Trade Alert.

Much of the call activity is due to one spread trade after an18,855-contract block of March $17 strike calls traded on AVP at 64 cents and18,855 July $17 strike calls traded for $1.38, said Joe Cusick at optionsXpressin a report. The spread, for 74 cents, traded on the International SecuritiesExchange and data from ISE indicate the March $17s were sold as a closingposition while the July $17 strike calls were bought as a new position.

If so, the position adjustment or "roll" appears to express diminishingexpectations for a substantial rally in the stock through the March expirationin 43 days, but hopes the stock will be trading at higher levels by mid-July,Cusick said. "At the end of the day, the sentiment seems to reflect the viewthat Avon shares will be trading north of $17 by the July expiration," saidWhatsTrading.com options strategist Frederic Ruffy. The company is due to reportearnings on Feb. 12.

Goldman Sachs Group, in a report this week, advised clients to buy Februarycalls on American Express Co for Feb. 6 analyst day, an event that ishistorically more stock moving than earnings. Specifically, Goldman Sachsderivative strategists looked at AXP February $60 calls, offered at 54 centsbased on a stock reference price of $59.45. Call buyers risk losing the premiumpaid if the stock closes below strike price on expiration.

Over the past 21 analyst days, the shares have moved an average of 1.4percent, making these events more stock moving than earnings where the medianearnings-day move is 1.3 percent over the past eight quarters, Goldman said.American Express one month option prices are also at the lowest level since2007. One month implied volatility of 15 percent has contracted by three pointssince fourth-quarter earnings, relative to the average compression of two pointsfor the rest of the term structure, the report said.

"Historically, buying calls ahead of analyst days has been profitable,"Goldman said. In a Sept. 10, 2012 report, the strategists said that buying callsahead of analyst days has yielded an average positive return of 20 percent overthe past 10 quarters. "Analyst days have generally been positive events that areunderestimated by the options market," they said.

Put trading has picked up this week in the iShares MSCI Brazil index andthe iShares MSCI Mexico fund where large pair trades were initiated,suggesting that Brazil may outperform Mexico in the first half of 2013. Traders likely also see EWW volatility as cheap versus EWZ volatility in these emergingmarkets exchange-traded funds, option strategists said.

Large put blocks in EWW and EWZ on Wednesday and Thursday suggest aninstitution placing a large cross-border directional trade, which favorsBrazilian market returns over Mexico into the summer months, said Trade Alertpresident Henry Schwartz. The institutional trader on Wednesday bought 13,500June $73 strike puts for $2.67 in the EWW Mexico fund against the sale of 17,600June $56 puts for $2.40 in the EWZ Brazil fund and both were new positions. Bothpositions are struck about 8 percent out-of-the-money and notional value foreach position was near $100 million, with about $840,000 net premium collected,Schwartz added. On Thursday, the trader is back, with 13,400 more EWW $73 strikeputs bought for $2.79 and 15,400 EWZ $56 strike puts sold for $2.51, apparentlydoubling the trade, Trade Alert data show.

The trader is long delta in the EWZ Brazil fund and short Mexico via EWW.The 52-week return on EWW is about 29.8 percent, while EWZ was down 11 percent,Schwartz said.